Capital Goods Sector Check - Green Hydrogen, The Beginning: ICICI Securities

ICICI Securities Report

India has the advantage of lower cost of renewables. It is looking to establish itself on the green hydrogen map. Note that manufacturing of GH2 needs:

1. lower cost of renewables and

2. an electrolyser manufacturing ecosystem.

In the last few days, India took its initial footsteps towards starting the ecosystem, conducting the first rounds of incentives for:

1. GH2 production and

2. electrolyser manufacturing.

It has set aside Rs 190 billion towards incentives for the green ecosystem. Larsen & Toubro Ltd., Adani Enterprises Ltd. and Reliance Industries Ltd. were the key beneficiaries for electrolyser manufacturing, while Reliance, ACME and Greenko were the key beneficiaries for GH2 production.

We expect the hydrogen purchase obligations to be announced in the next few months – this will be critical for the sector development.

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